Good evening. My name is Robert Rivas and I am an attorney representing the
New Jersey Division of the Ratepayer Advocate. Our office was created by the
New Jersey Legislature to represent ratepayers in cases such as this where a
utility seeks an increase in rates or a change in services.

In compliance with the New Jersey Board of Public Utilities (“BPU”
or “Board”) Orders dated April 30, 2003 and July 16, 2003, Atlantic
City Electric Company d/b/a Conectiv Power Delivery (“Atlantic Electric”)
and South Jersey Gas Company (“South Jersey”) individually filed
proposals on April 1, 2004 with the Board requesting an increase in their electric
and/or gas rates to recover the costs of the Permanent Universal Service Fund
(“USF”) program. The USF Program was established by the Board pursuant
to the New Jersey Electric Discount and Energy Competition Act to assist qualifying
low-income customers in paying their energy bills.

On June 18, 2003, the Board established a statewide program through which funds
are collected from all energy customers through a uniform rate system. The New
Jersey Department of Human Services (“DHS”) serves as administrator
of the funds and authorizes the disbursements to benefit eligible energy customers.
Based on the information that is known to date, the 2004-2005 USF rate is proposed
to collect $105.5 million on a statewide basis.

In the Atlantic Electric filing, the Company proposed an increase to its electric
customers of .0887 cents per kilowatt-hour of usage. The impact on a typical
monthly residential bill reflecting 750 kilowatt-hours of usage would be 67
cents, an increase of approximately seven tenths of one percent.

In the South Jersey filing, the Company proposed an increase to its natural
gas customers of 0.62 cents per therm. The impact on an average monthly bill
for a typical residential heating customer, based on 100 therms of usage, would
be 62 cents, or approximately one half of one percent.
.
In the event the DHS or the Board should modify the USF Program prior to July
1, 2004 to increase benefits to participants or otherwise increase the costs
of the program, both Atlantic Electric and South Jersey have requested authorization
to include such additional costs in the July 1, 2004 rate change.

Both have also requested authorization to automatically implement further rate
increases if the DHS or the Board should modify the USF Program in a manner
that increases benefit levels or other costs by at least $5 million after July
1, 2004. As proposed by Atlantic Electric and South Jersey, the utilities would
provide 30 days prior written notice of any such rate increases to the Board
and the Division of the Ratepayer Advocate. Any such increases would be reconciled
in the utilities’ next scheduled annual USF filing, to be made no later
than April 1, 2005.

Atlantic Electric states that for every $5 million over the currently estimated
$105.5 million in 2004-2005 USF Program costs, the Company’s bills would
increase by approximately 0.04%, or an additional 4 cents per month above the
increase mentioned earlier for a residential electric customer using 750 kilowatt-hours
per month.

South Jersey states that for every $5 million over the currently estimated
$105.5 million in 2004-2005 USF Program costs, the Company’s bills would
increase by approximately 0.03% or 4 cents per month above the increase mentioned
earlier for a residential gas customer using 100 therms per month and 1,200
therms annually.

Our office is engaged in a complete review of the filings by Atlantic Electric
and South Jersey based on the information that is being supplied and updated
by the Companies. We have retained the services of expert consultants to assist
us in our review. The Ratepayer Advocate's inquiry is focused on the critical
issues of whether the proposals allow ratepayers to pay the lowest rates possible
consistent with the Board’s Order.

The Board will make the final decision regarding the proposals.

The purpose of today’s hearing is for you, the customer, to voice your
opinion, relate your experiences and offer comments about your Company’s
rates and any service problems you may be experiencing. It is important that
you express your views so they may become part of the record on which the Board
of Public Utilities will base its decisions. The Ratepayer Advocate also needs
to hear your views. Your active participation is strongly encouraged to help
in our evaluation of the Companies’ proposals and our preparations.

This hearing is being transcribed and your comments will become part of the
record. I would like to reiterate the importance of your participation so that
the Ratepayer Advocate can have a clear record of your concerns and interests.

On behalf of the Ratepayer Advocate, I would like to thank you for attending
tonight’s hearing.